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Florida's comprehensive P3 legislation signed into law

A bill boosting public private partnerships in Florida has been signed into law and will be effective July 1, 2013. Florida law has permitted P3 projects on a sector specific basis for years, primarily for transportation, water, housing and municipal infrastructure projects. These partnerships have been large, notable, and successful. Now, House Bill 85, signed by Governor Rick Scott on June 27, 2013, opens the doors for the P3 project delivery system throughout Florida.

The new law allows the use of P3 by any responsible public entity, including counties, municipalities, school boards, regional entities, and state subdivisions. Public private partnerships may be used for qualifying projects, including any facility or project that serves a public purpose, and improvements of existing facilities (including equipment). The responsible public entity must find that the proposed project is in the public’s best interest and that the project will be owned by the public entity on completion or termination of the agreement.

A responsible public entity may solicit proposals for such projects, or may receive unsolicited proposals. If unsolicited proposals are received, the public entity must publish its intent to receive other proposals for such a qualifying project. Public entities have discretion to determine the appropriate time frame for receiving competing proposals.

Private entities seeking to enter into P3s must meet minimum standards for professional engineering and contractual services for traditional procurement projects, and provide bonding and other assurances of performance and payment to subcontractors and suppliers. In the event of private partner default, the public entity is not obligated to pay from sources other than project revenues.

Comprehensive P3 agreements may authorize the private partner to impose fees on members of the public, but revenues must be regulated by the public entity, with a negotiated amount to be returned to the public entity over the life of the agreement. The new law further allows multiple financing options, including private source financing, public entity loans, and great flexibility to use other innovative finance techniques, including a public entity’s own capital or operating budget. At the end of a comprehensive agreement with a private partner, the public entity may use the project’s revenues to pay for operation and maintenance of the facility.

The new law also authorizes P3 for county road projects. Counties may receive or solicit proposals and enter into agreements with private entities to construct, extend, or improve county roads. Prior to approval the county must conduct a public hearing to determine that the partnership is in the public’s best interest, that the project will be county-owned on completion, that there are safeguards against additional cost or service disruptions, and that there is a financial benefit to using P3 instead of traditional procurement.

Many public projects in Florida sit on the shelf due to lack of funding. The new law encourages public and private partners to use innovative means to get these projects built, and bring economic growth to Florida. Florida’s new P3 law becomes effective on July 1, 2013.

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